Exam 9: Receivables

An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a

Financial statement data for the years ended December 31 for Parker Corporation are as follows:?? Current Year Prior Year Sales \ 2,595,600 \ 2,409,500 Accounts receivable: Beginning of year 390,000 400,000 End of year 434,000 390,000 (a) Determine the accounts receivable turnover for each year. Round to one decimal place. (b) Determine the days' sales in receivables for each year. Round to whole days. (c) Does the change in accounts receivable turnover and days' sales in receivables fromthe first year to the second year indicate a favorable or unfavorable trend?

Two methods of accounting for uncollectible accounts are the

When referring to a note receivable or promissory note,

The direct write-off method records bad debt expense when an account is determined to be uncollectible.

Fellows Corporation has determined that the $2,700 accounts receivable due from Andrew Stevens is uncollectible. Compare the journal entry that is required under the direct write-off method to the journal entry that is required using the allowance method.

Match each description to the appropriate term (a-h). -The dollar amount stated on a promissory note

At the end of a period (before adjustment), Allowance for Doubtful Accounts has a credit balance of $5,000. The Accounts Receivable balance is analyzed by aging the accounts and the amount estimated to be uncollectible is $50,000. The amount to be recorded in the adjusting entry for the bad debt expense is $45,000.

For each of the following notes receivables held by Winter Company, determine the interest revenue to be reported on the income statements. Round answers to nearest whole dollar. Date Face Rate Term Year 1 Interest Revenue Year 2 Interest Revenue Aug. 8, Year 1 \ 15,000 7\% 180 days Oct. 7, Year 1 22,000 8 60 days Jan. 6, Year 2 30,000 8 90 days Nov. 12, Year 1 28,000 9 60 days

Determine the due date and the amount of interest due at maturity on the following notes:? Date of Note Face Amount Interest Rate Term of Note (a) October 1 \ 21,000 8\% 60 days (b) August 30 9,000 10 120 days (c) May 30 12,000 12 90 days (d) March 6 15,000 9 60 days (e) May 23 9,000 10 60 days

When a company receives an interest-bearing note receivable, it will

For fiscal Year 1 and Year 2, Grange Co. reported the following:? $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$ Year Ended December 31, Sales \3 4,124,961 \4 4,123,486 Accounts\nobreakspacereceivable 719,365 749,321 (a) Compute the accounts receivable turnover for Year 2. Round to two decimal places. (b) Compute the days' sales in receivables at the end of Year 2. Round to two decimal places.

The journal entry to record a note received from a customer to replace an account is

On June 30 (the end of the period), Brown Company has a credit balance of $2,275 in Allowance for Doubtful Accounts. An evaluation of accounts receivable indicates that the proper balance should be $30,025. Journalize the appropriate adjusting entry.

At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $3,500,000. Bad debt expense is estimated at ½ of 1% of net sales.?Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Allowance for Doubtful Accounts has a debit balance of $1,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $12,900. Which of the following entries records the proper adjustment for bad debt expense?

The interest on a 6%, 60-day note for $5,000 is $300.

Paper Company receives a $6,000, three-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note? a. Notes Receivable, Dame Company $\quad\quad$ 6,000 $\quad\quad$ Accounts Receivable, Dame Company $\quad\quad$ 6,000 b. Notes Receivable, Dame Company $\quad\quad$ 6,090 $\quad\quad$ Accounts Receivable, Dame Company $\quad\quad$ 6,090 c. Notes Receivable, Dame Company $\quad\quad$ 6,090 $\quad\quad$ Accounts Receivable, Dame Company $\quad\quad$ 6,000 $\quad\quad$ Interest Revenue $\quad\quad$ 90 d. Notes Receivable, Dame Company $\quad\quad$ 6,000 Interest Revenue $\quad\quad$ 90 $\quad\quad$ Accounts Receivable, Dame Company $\quad\quad$ 6,000 $\quad\quad$ Interest Receivable $\quad\quad$ 90

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment), and bad debt expense is estimated at 4% of credit sales. If credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts

Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.